Supported by US interest rate cut expectations and a weaker US dollar, overnight lead futures showed positive momentum. [SMM Lead Morning News]

SMM December 2:

Overnight, LME lead opened at $1,986/mt. It moved sideways during the Asian session. Entering the European session, LME lead touched a low of $1,975/mt and then rebounded, supported by US interest rate cut expectations and a weaker US dollar. Bulls increased their positions, pushing LME lead up to a high of $2,008/mt. It pulled back slightly before closing and ended at $1,999.5/mt, up $18.5/mt or 0.93%, forming a small bullish candlestick.

Overnight, the most-traded SHFE lead 2601 contract opened higher with a gap at 17,145 yuan/mt. The trading center of SHFE lead shifted upward. Early in the session, it fluctuated along the daily average line, reaching a high of 17,230 yuan/mt. After a slight correction during the night session, it fluctuated upward again, finding support at the 10-day moving average, and finally closed at 17,195 yuan/mt, up 110 yuan/mt or 0.64%, forming a small bullish candlestick.

This week, primary lead smelters in regions such as Yunnan, Anhui, and Jiangxi were under maintenance, leading to tight regional supply of lead ingots. Meanwhile, lead prices were in the doldrums, prompting primary lead smelters to hold back sales at low prices, while secondary lead producers also held prices firm for shipments. Additionally, lead-acid battery enterprise production improved relatively in December, with intentions to build inventory on price dips, leading to some reduction in warehouse inventories around consumption areas. This caused a further decline in social inventory of lead ingots. In December, maintenance and resumption coexisted among primary and secondary lead enterprises, but after offsetting the production increases and decreases, there were still expectations for a certain reduction. With downstream enterprises purchasing as needed, social inventory of lead ingots is expected to remain at low levels in the short term. Overall, support below lead prices is strong, and short-term trends may rebound.

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